19 May 2016
The Non-Existent Carrot
What TTIP can tell us about the EU’s corrosive affect on Europe.
by Neil Tidmarsh
Last week, Greenpeace in the Netherlands leaked documents about the talks between the teams from the USA and the EU trying to negotiate a free-trade deal – a Transatlantic Trade and Investment Partnership (TTIP). The leak provoked a media storm across the continent.
Most of the storm was a reaction against the secrecy in which the talks are being held. Various newspapers complained that Europe’s citizens are being kept in the dark while big multi-nationals are being consulted at every step. While it’s difficult to see how such tricky and delicate negotiations could be conducted out in the open without giving away tactical advantages to the other side (it’s asking the players in this high-stakes poker game to show their cards to all and sundry), nevertheless the reaction is an interesting reflection of Europe’s hatred and fear of the EU’s lack of transparency and democratic accountability, and the way such failings will inevitably breed suspicion and mistrust.
Even more interesting, and of greater concern, is the intense and widespread opposition to TTIP across Europe which this media storm was riding. In Germany, support for it has slumped from 55% two years ago to just 17% today. This week Francois Hollande said that France wouldn’t back TTIP as it stands. And the leak, by showing each side’s negotiating positions, must have been an attempt to sabotage the deal. Why this hostility? Isn’t a free trade agreement with the USA exactly what an outward-looking and enterprising Europe of the 21st century wants?
No. Because the Europe of the 21st century isn’t outward-looking and enterprising. Europe under the EU is inward-looking and protectionist. The EU is a customs union – it’s designed to enable the member states to trade freely with each other within the union, but protects them from competition by making it difficult for others to trade into the union from outside (and, by extension, making it difficult for members to trade out of the union with non-members). Europe under the EU is frightened of the outside world, of globalisation, of free trade, of the giant on the other side of the Atlantic. No wonder the TTIP leaks provoked fearful warnings about US business, US technology, US government, about the threats they pose rather than the opportunities; the dangers rather than the benefits.
Of equal interest and concern is the leaden pace of these negotiations. They’ve been going on for three years now, but very little progress has been made in all that time. Three years! How long will it take to hammer out the whole treaty? Years and years! And then it will have to be ratified by every one of the 28 parliaments of the 28 member states. How long will that take? Will it ever actually happen? Commentators are beginning to say that the likelihood of it ever being completed is very slim.
And this – the TTIP – is the carrot President Obama dangled under our noses after waving the “back of the queue” big stick at us. A carrot which doesn’t yet exist and which may never exist. A carrot which the UK may well be able to grow faster on its own if it votes itself out of the communal vegetable patch. After all, the USA negotiated a free trade deal with South Korea in just one year, with Australia in less than a year, with Israel in one year, with Singapore in two years…
TTIP shows up the EU for what it really is – inward-looking, self-defeatingly defensive, slow-moving and inefficient. It is so ponderous and sclerotic that it is in danger of seizing up altogether. The signs of impending inertia and paralysis aren’t hard to find. The damage that these short-comings are inflicting on Europe isn’t hard to find, either. Last week, the Greek finance minister wrote to the other eurozone finance ministers warning them that Greece was in danger of becoming “a failed state”. This week, it was reported that the eurozone has only just returned to pre-credit crunch levels of GDP – that’s ten years lost, and the damage is still there in the shape of high unemployment (over 20% in Greece and Spain, over 10% in France, Italy, Portugal) and political turmoil (anti-austerity votes in Spain, Portugal and Ireland have resulted in no government at all, and anti-EU votes have seen a disturbing rise in extremist parties across the continent). The time and energy expended by the EU looking inwards to solve its own internal and largely self-created problems (the sovereign debt crises of its southern members, the collapse of Schengen, etc) have been time and energy wasted, time and energy which should have been invested in an outward-looking engagement with the wider world.
Of most interest and concern, however, is the way in which the EU’s shortcomings – its stubborn and introverted resistance to change and necessary reform – are beginning to filter down through Europe to the level of individual member states and citizens. France’s woes are a good example of this. This resilient and dynamic nation amazed and impressed the world in the 1870’s by taking only a year or two to pay back the war indemnities imposed on it by Germany after its defeat in the Franco-Prussian war, crushing indemnities which the world thought the war-damaged country wouldn’t be able to pay back for decades, centuries even, if at all. But today this country is a microcosm of the EU’s failings. Adam Sage, the Paris correspondent of The Times, wrote this week about Zlatan Ibrahimovic, the Swedish soccer star of Paris Saint-Germain, describing him as “a symbol of the thrusting, self-confident, international society that France cannot quite bring itself to become”. Mr Sage says the modernisation of this French soccer team was Nicolas Sarkozy’s one and only success in his attempt to modernise the nation; all his other attempts “to turn France into a hard-working and outward-looking nation” failed.
Sarkozy’s successor President Hollande has also failed. His initial policies of high-spending and high taxation only compounded his country’s problems; they combined with its restrictive labour laws to stagnate the economy. Even a government minister admitted that the country was more or less bankrupt. Unemployment rose even further, dynamic and enterprising Frenchmen fled the country to set up businesses in the UK, and the ratio of public spending to GDP rose to its current level of 57%, the highest of any major economy. M. Hollande has recently changed tack and tried (rather feebly) to liberalise the economy and relax its restrictive labour regulations; but he has found that change is well-nigh impossible. Political and popular resistance has been overwhelming. Last week he had to use a presidential veto to force through even a heavily watered-down version of his reforms. The man behind Hollande’s new-found sense of reality is economy minister Emmanuel Macron, who has just launched a new centrist political movement “En Marche” which calls for change and reform; it’s significant that his first rally took place last week not in France but among the ex-pat French business community here in London. But his mission is probably doomed, according to Adam Sage; “If Macron becomes president” he writes, “I suspect that, like his predecessors, he would cave in to the conservatives who sweep all before them in France.”
That’s the main point; the whole of Europe, under the EU, has become conservative (with a small ‘c’) and reactionary. Change and reform have become almost impossible; inertia and stagnation have become the order of the day. Even the protest movements sweeping the continent are reactionary and backward-looking, not reformist and revolutionary. The French students occupying public spaces around the clock in their “nuit debout” demonstrations, the masked protestors throwing stones and Molotov cocktails at police in Athens, the tens of thousands peacefully protesting in Syntagma Square, the new left-wing party Podemos in Spain, the extreme right-wing followers of le Pen in France and the Freedom Party in Austria – they are all demonstrating against change and reform; they all want things to stay the same, indeed to go backwards, to return to that innocent time when we could enjoy spending more than we earned, before reality proved that having your cake and eating it is unsustainable.
These are not signs of an enterprising, energetic, resilient, vigorous and dynamic community. On the contrary. Europe has lost its vitality, its revolutionary spark, its ability to stay on its toes and revive and reinvent itself with new ideas and activities. The EU is sapping the continent’s unique world-leading energies, suffocating its native ingenuity, reducing it to inertia, timidity, waste and inefficiency.
Of course Britain is a European nation and must go forward in partnership with its European neighbours, co-operating with them over trade, security, justice, education and all the other concerns we all share. But the EU is not the system for that co-operation. It is too wasteful, ponderous, bureaucratic, rigid and top-heavy, and insufficiently democratic and transparent. Britain is saying to its neighbours that we should all fly off into the future together, but the plane built for that flight has been badly designed, indeed is dangerous. We’re not alone in that opinion. We’ve been suggesting for some time that we should all take the opportunity now to rebuild it before it’s too late. If that opportunity hasn’t been taken, then we cannot be blamed for refusing to embark on that reckless flight and for attempting to find our own way into the future instead. Onwards and outwards to engage with a wider world. And even then, there is no reason why we shouldn’t continue to try to co-operate with our neighbours over all those concerns that we share with them.
This week there were gloomy reports suggesting that Britain is facing a recession whether we stay in the EU or choose to leave it. The question now seems to be whether our best chance of finding the shortest route through that approaching storm is within a restrictive, inflexible, sluggish, blinkered system, or on an independent, efficient, fast-moving, adaptable, dynamic and outward-looking platform of self-sufficiency.
As for that, do you remember that recession in the early 1990’s, when we staggered along within the exchange-rate mechanism, our heads barely above water? Then we were chucked out of the mechanism. Was it a disaster? No. Quite the opposite. All of a sudden we found ourselves with room to manoeuvre on our own and were soon out of recession. We watched the waters recede and the sun come out, and shook our heads and exclaimed “Thank goodness we’ve woken up from that nightmare!”
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